A collective agreement (CA) is an agreement negotiated between a group of employees and their employer and subsequently lodged with the Workplace Authority. The Workplace Authority has the responsibility of removing “prohibited content” from collective agreements.

Prior to 27 March 2006, collective agreements were known as ‘certified agreements’ as these had to be 'certified' by the AIRC as complying with the requirements of the Workplace Relations Act 1996 - List of Sections 1996 (Cth). The AIRC continues to oversee these pre-reform ‘certified’ agreements subject to some modifications set out in the Workplace Relations Act 1996 (Cth).

A CA may be collectively negotiated between an employer and union(s) or an employer and the employees (without union involvement). A majority of employees must approve the agreement and a declaration to that effect needs to be lodged with the Workplace Authority. Once a CA is lodged with the Workplace Authority it displaces any award provisions that previously applied to the employees. New employees are automatically covered by the agreement which is in place at the workplace, unless otherwise agreed in the CA or they have signed an individual Australian Workplace Agreement (AWA).

Although a CA must specify an expiry date, which can be for a maximum of five years, it can also be terminated at any time with the approval of the majority of employees. The CA may continue to apply after the expiry date unless alternative arrangements are made. After the expiry date, parties are also able to unilaterally terminate the CA by taking reasonable steps to inform the other party at least 90 days before a declaration terminating the CA is lodged. If this happens the employees revert to the AFPCS for some of the terms and any relevant protected award conditions. This gives the employer considerable bargaining power in negotiating the next agreement

Employees are also able to negotiate individual Australian Workplace Agreements (AWA) even while they are bound by a current CA. An individual AWA excludes the application of a CA to the individual employee.